Bank of America: Federal Reserve Loser

Bank stocks on Wednesday turned sharply lower after the Federal Reserve released minutes of the Open Market Committee's recent meetings.

The KBW Bank Index ( I:BKX) was down 2% to close at 54.54, with all 24 index components showing declines.

Bank of America

Shares of Bank of America have returned 2% this year after more than doubling in 2012. In 2011, the stock tumbled 58%.

The shares trade for 0.9 times their reported Dec. 31 tangible book value of $13.36, and for 9.2 times the consensus 2014 earnings estimate of $1.29 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $1.

Bank of America remains very much a recovery play, as the company works through its mortgage mess, including $28.3 billion in unresolved mortgage repurchase demands from investors as of Dec. 31. However, the company put a major dent in that number early in January, as a mortgage putback settlement with Fannie Mae ( FNMA) lowered repurchase claims by roughly $12.2 billion.

Following reports that Bank of America CEO Brian Moynihan earned $12.1 million in 2012, and was paid more than JPMorgan Chase ( JPM) CEO James Dimon, who earned $11.5 million, Rafferty Capital Markets analyst Richard Bove released a note taking the media to task for bashing banks over executive pay.

"These two banks employ more than half a million people. Yet their CEOs make about 25% of what they could make if they were shooting guards on the Los Angeles Lakers or good golfers or tennis players, let alone quarterbacks in Denver," Bove wrote.

The analyst went on to say: "The AFL-CIO publishes its list of the top 25 CEOs according to compensation. The average take was $63.5 million and there were no bankers on the list."

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.